China: Beware of scammers in the ‘deceptive’ metaverse, banking watchdog warns

One of China’s top financial regulators is warning the public about the risk of scams in the metaverse. The Chinese Banking and Insurance Regulatory Commission (CBIRC) issued the public warning when the metaverse has become the biggest buzzword in tech, reminding local investors to beware of fraudsters targeting innocent victims using metaverse-related projects.

The CBIRC claimed in its warning that the metaverse had become a hotbed of financial crime, with scammers “absorbing capital” from unsuspecting victims. 

In a statement published on its website, the watchdog outlined some of the popular scams related to the metaverse. They include packaging of metaverse-related concepts, such as artificial intelligence, augmented and virtual realities, and video gaming into a hi-tech package. The scammers then tout these projects as the future of the metaverse, raise funds from investors and then take off.

Other scammers have flooded the play-to-earn gaming sector, selling the native tokens of the P2E platforms and then taking off without developing the projects. There are others who hype the concept of virtual real estate in the metaverse and scam those that buy them.

Describing the metaverse as a deceptive world, the Office of Inter-Ministerial Joint Conference on Disposal of Illegal Fund Raising urged Chinese investors to report any scammers they encounter on metaverse projects.

“The fraudulent activities under the banner of “Metaverse,” which is more attractive and deceptive, and participants are prone to property damage. The public is requested to enhance their awareness of risk prevention and identification capabilities, and beware of being deceived,” it said in its statement.

With every other major global tech giant exploring the metaverse, led by Meta Platforms and Microsoft, this virtual world is getting significant attention within tech circles and beyond. Gaming has especially become central to the metaverse, with Meta pushing its Oculus VR headset brand as the gateway to the metaverse, while Microsoft spent $69 billion to purchase Call of Duty maker Activision Blizzard, the world’s fifth-largest gaming company.

As the metaverse shapes up, questions are already popping up about whether it will be decentralized or if the big tech giants will monopolize it, much like they have done with the Internet (Google and Meta, and their subsidiaries such as YouTube, WhatsApp and Instagram account for about 70% of all Internet activity). A recent study found that 77% of Americans are opposed to a Mark Zuckerberg-controlled metaverse.

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